A credit card is a system of payment in which money is not removed from the user's account after every transaction. The issuer lends money to the user to be paid to the merchant. It is also does not require that the balance be paid in full each month. A credit card allows the user to revolve their balance, at the cost of having interest charged.
A secured credit card is a type of credit card secured by a deposit account owned by the user. Typically, the user must deposit between 100% and 200% of the total amount of credit desired. Thus, if the user puts down $1000, they will be given credit in the range of $500-$1000. This deposit is held in a special savings account. The user of a secured credit card is still expected to make regular payments, as they would with a regular credit card, but should they default on a payment, the card issuer has the option of recovering the cost of the purchases paid to the merchants out of the deposit.
A prepaid credit card (referred to herein as a “prepaid card”) is not really a credit card, as no credit is offered by the card issuer: the user spends money which has been “stored” via a prior deposit by the user or someone else, such as a parent or employer. However, it carries a credit card brand (e.g., Visa or MasterCard) and can be used in similar ways. After purchasing the card, the user loads it with any amount of money and then uses the card to spend the money. As more consumers require a suitable solution to rebuilding credit, recent changes have allowed some credit card companies to offer prepaid credit cards to help rebuild credit. Credit card companies as well as various other financial institutions may issue both types of cards to a user with different card numbers.